The S&P/ASX 200 Index (ASX: XJO) has had a rather topsy-turvy start to the final trading day of the week. The ASX 200 plunged soon after open but has since rebounded. It currently remains up by around 0.26% at just over 6,540 points. But it's a different story when it comes to ASX tech shares today.
ASX tech shares are among some of the ASX's best performers today. Not only is tech currently the best-performing ASX sector on the markets, but some individual tech shares are topping the best-performing shares so far today.
Take Block Inc (ASX: SQ2) shares. They are currently up a healthy 9.63% at $97.34 each. Or Zip Co Ltd (ASX: ZIP), up 13.64% at 50 cents a share. Life360 Inc (ASX: 360) is leading the sector with its gain of 14.11% to $2.75 a share. Appen Ltd (ASX: APX) is up 5.69%, while WiseTech Global Ltd (ASX: WTC) has risen 4.68%.
So what's behind this breakaway performance from ASX tech shares today?
Well, a significant factor could be the performance of the US markets last night (our time).
Overall, US shares had a day of mild gains, with the Dow Jones Industrial Average Index (DJX: .DJI) rising by 0.64%. But US tech shares led the gains. Even though the Dow only rose by 0.64%, the tech-heavy NASDAQ-100 (NASDAQ: NDX) was up a far healthier 1.47%.
Are US tech shares leading ASX tech shares higher?
Many US tech shares rocketed in last night's session. Apple Inc (NASDAQ: AAPL) rose by 2.16%. Microsoft Corporation (NASDAQ: MSFT) was up 2.26%, while Amazon.com Inc (NASDAQ: AMZN) was up by 3.2%. Block's US listing – Block Inc (NYSE: SQ) – was up almost 11%.
These moves followed some new comments from US Federal Reserve chair Jerome Powell. Powell was speaking in front of the US Senate's Committee on Banking, Housing, and Urban Affairs. Here's some of what he said:
Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways. Inflation has obviously surprised to the upside over the past year, and further surprises could be in store.
We therefore will need to be nimble in responding to incoming data and the evolving outlook. And we will strive to avoid adding uncertainty in what is already an extraordinarily challenging and uncertain time.
We are highly attentive to inflation risks and determined to take the measures necessary to restore price stability. The American economy is very strong and well positioned to handle tighter monetary policy.
This statement may have spurred the rises we saw in US tech shares last night. It certainly did nothing to harm investors' mood anyway.
So ASX tech shares seem to be following the leads of their US counterparts on the markets today. This is not unusual – we often see a tight correlation between the two markets' tech sectors.
No doubt these moves in ASX tech shares today will be met with some relief from investors, given the painful week or two we have just witnessed.
